Reader Comments

I never have understood why e-books aren't tremendously less expensive than they are. No production costs what-so-ever, no overhead, no damaged books to return......They should be at least half the price that they are! Until they are, I won't be buying any e-books or e-book readers. I do have Kindle, Nook and Kobo on my Droid X, but I have never bought a book for them, I only download the free books from their stores.

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I'm sorry to break up a widely-held myth, but there ARE production costs associated with eBooks. The incremental cost of each additional copy is, of course, minuscule, but...

Books still need to be written, edited, copyedited including fact and continuity checking, proofread, and, for eBooks, they need GOOD formatting control to keep from driving readers crazy, just as pBooks need good typesetting for the same reason.

And if you're talking about reprints of older books, those books still need to be either scanned, OCRd and proofread, or typed-up and proofread. Even for a reasonably short piece of fiction, say a 350-page paperback, it takes me between 10-15 hours to do a good job, and I do scan-and-OCR to get source texts.

The above endeavors require people, and people like to eat hot food and sleep indoors. This is why I never quarrel with paperback-level pricing for eBooks.

However, I do agree that anything over about $8 for an eBook, particularly fiction, is ridiculous. I've never forgiven the idiots who insisted on $20 prices for eBooks years after the paperbacks had come out at $7.99.

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I am pretty sure that the AC's point was that content creation and presentation cost for older works (such as "Stranger in a Strange Land") was covered long ago.

I think he's trying to say that 15 hours of scanning/OCRing/proofing doesn't equate to >$7 per negligible incremental cost for digital distribution in his mind. I tend to agree with the thought.

I think the AC was trying to ask the OP how 15 hours of additional work on an existing older piece justifies the >$7 retail on all-but-free-to-distribute copies.

I don't think he was comparing SiaSL to the OP's example of $20 e-books after paperpacks are available, I think he was asking why such older works aren't, say, $3 if the additional production cost to transform an older book to an e-bokk is 15 hours of labor.

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If you advocate paperback pricing for ebooks then you are in effect advocating that the fixed costs of prepping the ebook + the server/bandwidth costs for distribution equal the printing, storage, and distribution costs of the paperback. IMO that is insane as I cannot imaging those two costs are even close. This fails my basic reality test as a consumer and $8 ebooks make me feel like I'm being ripped off. If my choice was $8 for an ebook or nothing I'd stop reading.

Worse, as long as Borders remains in business (how long this lasts is debatable) paperbacks will be cheaper than $8. Borders 30% off coupons are common as dirt if you are a rewards club member (free to join) so if you have a local Borders still in business your paper cost is closer to $5.60 + tax. So I can buy a paperback for $6 then resell it or share it with friends or buy an ebook for $8 or more and be stuck with it. Pretty bad choice IMO. From my point of view ebooks of fiction paperbacks need to be in the $3 range to justify me buying a reader.

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I'm sorry to break up a widely-held myth, but there ARE production costs associated with eBooks. The incremental cost of each additional copy is, of course, minuscule, but...

Right, but it's those marginal costs that drive price.

Books still need to be written, edited, copyedited including fact and continuity checking, proofread, and, for eBooks, they need GOOD formatting control to keep from driving readers crazy, just as pBooks need good typesetting for the same reason.

Those are fixed costs. They do not drive pricing. This is the kind of lesson one expects in "economics in one lesson."

And if you're talking about reprints of older books, those books still need to be either scanned, OCRd and proofread, or typed-up and proofread. Even for a reasonably short piece of fiction, say a 350-page paperback, it takes me between 10-15 hours to do a good job, and I do scan-and-OCR to get source texts.

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However, those costs are covered ridiculously quickly, hence they don't actually drive what the cost of the book is. How many ebooks need to be sold to cover that fixed cost of 15 hours of scanning a book? Nowhere near how many that will actually be sold (assuming a book that actually sells).

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BIG WOOP!! I do all this in my job every day. Nothing special about it, there are now software tools for all that. Get real, how much of that e-book price gets back to the people "who eat hot food and sleep indoors", and how much goes onto bottom lines, to make money for people who didn't do a dammed thing? The economic/control landscape is changing, with respect to scarce/non-scarce commodities, NOW IF ONLY WE COULD HAVE E-OIL!!!

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To sehlat,

Good points all.

A free market does allow people to make dumb decisions -- that is, decisions not in their best interest. I am sure there are many cases where selling an ebook at a lower price would result in greater net profit.

And in the final analysis, neither the production cost nor the marginal cost determines price. In a marketplace, price is determined by what people are willing to pay.

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Indeed, he was exaggerating about the being no costs at all. But, the costs are tiny compared to paper based media.

"And if you're talking about reprints of older books, those books still need to be either scanned, OCRd and proofread, or typed-up and proofread."

...and that needs to happen exactly once. While, again, Thanatos was overstating things a bit, once you have the master there's virtually no costs involved beyond bandwidth and storage - and those are costs not usually borne by the publisher, and fairly trivial for a single title on a large retailer's servers.

"The above endeavors require people, and people like to eat hot food and sleep indoors."

...and they won't get to do that on my dime if the eBook is overpriced. I'll stick with a second hand paperback (new paperback are usually way too expensive for me to bother), or just not buy the book at all. I need to eat hot food as well, I don't need to buy overpriced books.

However, I agree with you last paragraph. Lump in those idiots who insist on DRM as well.

Response to: Thanatos on Apr 22nd, 2011 @ 6:54pm

The price is determined by how much people are willing to pay. Apparently enough people are willing to pay $9.99 for the kindle edition that they set the price at that amount evdntually, if sales taper off (demand drops), they'll lower the price. I already bought it for Kindle do I'm one of those people who saw the value in having it instantly and was willing to pay the two dollars mire than the paperback.

Re: Response to: Thanatos on Apr 22nd, 2011 @ 6:54pm

Re: Response to: Thanatos on Apr 22nd, 2011 @ 6:54pm

This is only a part of the calculation. Since the reproduction cost is (effectively) zero, it's in their interest to sell a copy to anyone who is willing to pay more than zero, if they can do so in a way that won't interfere with their ability to extract more from those willing to pay more. Obviously, this involves a knowledge problem. The ideal solution (from their perspective) is to lower the price gradually over time (to "sell" time preference) and to have larger sales at unpredictable intervals.

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The issue her isn't that the books cost less to produce, as fellow readers are pointing out, it's also about what people are willing to pay. There is a third issue however, and it's owning the market. This problem could be solved if another company could rise up and sell the same books for less. However, I don't see Amazon losing it's hold on the e-book market anytime soon, so they can sell these books at whatever price they want.

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Pricing is very rarely about the cost of production. It is always about the cost the market will bear. Kindle users are paying a premium for a gadget to read books with. Typically they have money and are younger, so charge more.

It's the same way at Barnes and Noble.

Even free

Setho is right, Marx was wrong. The economic value of an item is what people are willing to pay for it, not what it costs to produce. Economics in One Lesson is also available online for free, yet people are willing to pay infinitely more for other forms. Is this false economy? On the contrary, it is a fine example of consumer preference.

Re: Even free

Setho is right, Marx was wrong. The economic value of an item is what people are willing to pay for it, not what it costs to produce.

Economically speaking, this is incorrect. You buy something if you value it *more* than the price. Price is driven by marginal cost, and is the intersection of supply and demand. These are two sides of the same coin...

Second, why wouldn't a consumer potentially be interested in paying more for a book that is delivered instantly, is as light as a feather, and can be read in the dark, had the font changed, etc? I'm not saying I agree with their pricing but I am saying that it's a reasonable hypothesis that a certain group of people would pay more for a digital copy than a physical one. Since the audience for this book as of late has been more technical people, it becomes even more reasonable.

Third, this is a really old book that's been printed a lot. I'm sure they have paper copies lying around all over the place. Unlike a new book, where you have a text file on a computer somewhere, with an old book, you might have to pay someone to type it up, proofread it, etc. And 50 years after the book's release, you're towards the end of its sales life anyway. So the paper copies you printed in 1999 can be amortized over a higher number of customers than the ebook you formatted in 2011. Smaller market means higher price.

Fourth, why should the price of a good be pegged to its production cost? Mike is joking that the book's publisher doesn't understand pricing, but in reality it's Mike who doesn't get it. Pricing is always tied to what people are willing to pay. Oil is almost free to produce, just pump it out of the ground, but people are willing to pay a lot more for it. Cell phones cost much MORE than consumers want to pay, and hence the evil carrier subsidy. I spent a long time digging this ditch. Will you pay me for it? No? Because price is independent of effort.

Or, how about just read the book! (Do you take refunds on insults?)

> This process is the origin of the belief that prices are determined by costs of production. The doctrine, stated in this form, is not true. Prices are determined by supply and demand, and demand is determined by how intensely people want a commodity and what they have to offer in exchange for it. (p.111)

Second, why wouldn't a consumer potentially be interested in paying more for a book that is delivered instantly, is as light as a feather, and can be read in the dark, had the font changed, etc? I'm not saying I agree with their pricing but I am saying that it's a reasonable hypothesis that a certain group of people would pay more for a digital copy than a physical one. Since the audience for this book as of late has been more technical people, it becomes even more reasonable.

Yes, a certain group of people may pay more, but basic economics will tell you that you probably won't do very well in such situations. This is a competitive market, and price gets driven towards marginal cost. The people in the market are much more savvy than you would imagine and recognize this.

Third, this is a really old book that's been printed a lot. I'm sure they have paper copies lying around all over the place. Unlike a new book, where you have a text file on a computer somewhere, with an old book, you might have to pay someone to type it up, proofread it, etc.

Those are fixed costs. Meaningless in pricing.

And 50 years after the book's release, you're towards the end of its sales life anyway. So the paper copies you printed in 1999 can be amortized over a higher number of customers than the ebook you formatted in 2011. Smaller market means higher price.

No. Not necessarily. It may mean low demand, which would mean lower price... Remember, price is intersection of supply and demand.

Fourth, why should the price of a good be pegged to its production cost?

It's not *should*. This is basic economics: price gets driven to marginal cost. A recipe for failure is if you ignore this basic tenet, because it means competitors will eat your lunch.

but in reality it's Mike who doesn't get it.

I know my economics.

Pricing is always tied to what people are willing to pay.

In a competitive market, pricing is driven by marginal cost, or you fail. That's the point.

Oil is almost free to produce, just pump it out of the ground, but people are willing to pay a lot more for it.

Oil is not a competitive market. Oil is the very definition of a cartelized market.

Cell phones cost much MORE than consumers want to pay, and hence the evil carrier subsidy. I spent a long time digging this ditch. Will you pay me for it? No? Because price is independent of effort.

I never said price is the same as *EFFORT*. I said in a competitive market, price is driven to marginal cost. I mean, that's fundamental economics 101.

>This process is the origin of the belief that prices are determined by costs of production.

I never said price is "driven by" the cost of production. Price is driven by the market, but in a competitive market it's driven *TO* the *marginal cost* and if you don't price it there, the competition will beat you.

Yes, the intersection of supply and demand is what determines the price, but if you understand what that intersection means, you'd realize it's the same thing as the marginal cost. Do the math. The intersection of your supply and demand curve *always* matches the marginal cost in a competitive market.

The problem is you think I'm saying that marginal cost drives the price. I'm not. I'm saying that the market drives the price *to* marginal cost.

My argument is that this pricing is a mistake, and basic economics (the kind found in a book like this) should point that out.

Re: Re: Come on TechDirt...

Wrong. A pretty poor raw scan of a dead tree book is free.
It's not like a PDF I could reformat and put on my eReader.

It's not *should*. This is basic economics: price gets driven to marginal cost. A recipe for failure is if you ignore this basic tenet, because it means competitors will eat your lunch.

You think Amazon are stupid ?
Yeah, they're clearly going out of business.

In a competitive market, pricing is driven by marginal cost, or you fail. That's the point.

This is not a competitive market. Who else sells a Kindle edition ? To a person with a Kindle, who wants a full featured experience, this is the only deal in town.

My argument is that this pricing is a mistake, and basic economics (the kind found in a book like this) should point that out.

1. If people buy it, the pricing is not a mistake.
And as their pricing is easily changeable, they can rectify such a mistake easily. I wouldn't be surprised if that happens in an almost automated fashion when they assess sales periodically.

2. The price you should compare this with is that of a kindle edition elsewhere (or an other format that can be read on a Kindle) not a paper book. Comparing the price with that of a paper book is irrelevant. The Kindle owner didn't come here looking for a paper book.

3. Maybe (just maybe) Amazon has been reading Techdirt and realises that the content alone has a marginal cost of zero, so they are finding ways (ie Kindle) to add value over and above the raw content, so they can charge more for it.

I'd have thought the Mike Masnick reaction to this pricing would have been "go Amazon, finding a way to break free of the curse of downward price pressure".

Re: Economics knowledge

Amazon does set the price of eBooks.
What they can't always set is the cost, and so they have even chosen to sell them at a loss in the past.

It is in Amazon's interest to find the correct price point for optimal sales (even if it below the cost they are forced to pay) so they can go back to the idiot publishers and show them the figures. Semi-Emotional arguments ("eBooks should be priced at less than paper") won't make the publishers change their minds. But hard data might.

Thus they start high, watch sales, and reduce the price if required. And if they sell a ton with the price high, then that proves the Kindle adds value and the publishers might stop seeing it as an afterthought in their strategy.

If they start low, they can't put the price up later and so they have incomplete data.

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Isn't the whole point of copyright that this is not a "competitive market"? There is no direct substitute for this book -- either you're reading Economics in One Less or you're not. (Obviously, this frays at the edges, because perhaps there is a different economics book one might consider instead, so there is some limited fungibility.)

I think that the reason people object so strongly to the original article is this: Price is set by the intersection of supply and demand. True. But demand is the measure of the utility of the product to the purchaser. While it isn't obvious, it's certainly possible that the added conveniences of the Kindle edition make it sufficiently more valuable than the paperback. I will admit that, as much as I am staying away from ebooks due to DRM, I have all but stopped buying paperbacks because I don't want to invest the space in my apartment to keep them and I hate throwing out books. (Yes, the reseale market is the way to go but I haven't sat down to do that yet.)

I don't think it's helpful on either side to say that some just "doesn't get it". It's clear Mike grasps economics but his highly dismissive attitude was incorrect in this way. You can only a priori compare the paperback to Kindle if they're the same product and they are not, because the Kindle version has features the paperback lacks.

Re: Re: Come on TechDirt...

The pricing isn't a "mistake" if people are paying it and the seller watches and adjusts the price as competition acts.

Since there aren't any practical competitors for ebooks on Kindle at the moment, perhaps Amazon has the advantage of a much longer run before having to respond to a change in demand which would serve to drive the price down. Even if the book is available in other electronic forms, those of us with Kindles are in a bit of a walled garden. Right now it's generally a nice walled garden, but the walls are there, nonetheless.

It seems to me that the basic law of supply and demand trumps any other observations, such as pricing being generally driven toward marginal cost of production. If the demand is right, you can stave off that trend for a long time.

And value is a huge part of the pricing of a product, as you yourself point out a lot. You laud performers who do things like sell autographs (or whatever - being simplistic here) to make their art more valuable in the face other, cheaper (whether or not legitimate) sources for their content. That is entirely based on the "value" of the add-on, not the artist's cost in producing it. Who argues that it only took the artist three seconds and a negligible volume of ink to scrawl his/her name on the album cover as a rejection of the extra ten (or fifty or hundred) bucks for the special personalized edition of the album?

Is an ebook edition really less valuable than a paperback?

I think people don't understand the inherent value of having a digital edition that they can notate to their hearts content, carry the book with them along with quite possibly every book they've ever read, and can possess instantly through download. Good luck cramming your $7.95 paperback copy into your Kindle. Couldn't it possibly be that at $9.99 an ebook edition is more valuable to our 2.0 culture, or at least those who read ebooks on a regular basis? I understand that it most likely does cost less to publish an ebook edition but we are also not taking into account predetermined publisher contracts with content distributors to sell them at a set price regardless of what the paperback edition costs.

Re: Re: Re: Re: Is an ebook edition really less valuable than a paperback?

A dodgy poorly aligned graphic scan of a paper book is not THE SAME THING as a well formatted Kindle ebook. After OCR and a lot of formatting effort (akak "added value") it might be.

Do you think it is ?

I'm a huge fan of free ebooks - I get them from the Gutenberg site, in a format to go on my PDA for when I want to read while travelling or when forced to sit somewhere for hours unexpectedly. But the "free" PDF at the link given is no use for that whatsoever.

For time rich / money poor people, this may seem like a free eBook.

A friend of mine told me he could get a Napster streaming subscription and then record albums to MP3. Of course, track lengths were never exactly right so automatic track naming via internet webservice wasn't possible. And even after he manually renamed the tracks, the MP3 file properties were not as you'd like them so certain players (ie a Sonos) would not group tracks by author.
After he described the palaver he'd go through to get an album properly onto his Sonos, I compared this with buying the MP3 album from Amazon, and you know what ? The Napster route (probably violating TOS, maybe even illegal) simply wasn't cost effective for me.
I value my time more.

So for me there is NOT a meaningful free copy online (unless someone has a better link).

Re: Re: Re: Re: Is an ebook edition really less valuable than a paperback?

Agreed - cheaper may mean more sales (completely different argument to "cheaper is necessary because someone else sells it cheaper).

However

1. This economic theory generally applies to price sensitive markets. People who pay $200 for a device to read a book with no realistic expectation of the eBook ever being significantly cheaper than the paper version don't strike me as a price sensitive crowd of people.
Starbucks sell coffee at up to $5 when a plain filter coffee might be $2 elsewhere in the same street. But they are not catering to the same people as those who buy the cheap stuff elsewhere.

2. If (as widely suggested) Amazon's costs for eBooks are ridiculously high, then a 10% drop in Amazon sale price might halve their margin. It would have to double sales to be worth it. I think Amazon probably know what they are doing. Kindle owners will bitch about it then keep buying the books either way.

The only place where there is real competition in this arena is where Amazon try and get you to buy a Kindle over a Nook. After that, you're locked in.

Of course, the publishers might be idiots for demanding that price from Amazon/B&N. But while the eBooks sell, they'll keep doing it.

Same as MS will keep charging silly money for Office.

When you're competing with "free and not quite as good" (as some would perceive OpenOffice) dropping MS Office prices by 25% wouldn't win over many OpenOffice users. They've already learnt to live with the shortcomings of OO and it's FREE.

So if there's someone out there happy with a shitty crooked scan of a paper book for free, they don't suddenly buy the Kindle edition because the price comes down 25%, do they ?

Or maybe you are thinking of a load of Kindle users with only $50 per month to spend. They could buy more ebooks if the price was lower. But that's just the same revenue at lower margin, isn't it ?

Re: Re: Is an ebook edition really less valuable than a paperback?

So because there is a theoretical infinite supply of copies of the eBooks to be produced at a continually lower marginal price are you saying that the price should eventually be driven down to zero?

If we were talking about a good that is only produced in the digital form like software yet delivered in different formats such as DVD or download I could understand the DVD version costing more because the cost of production is more for a hard copy, plus you have a backup. When you compare a digital book vs a paperback other than the words on they aren't the same thing, the purchase truly is apples to oranges. The same could be said for when music CDs were first introduced. their cost for hypothetically the same thing, "the music" was and continued to be more expensive than a cassette. The eBook market is a young market that is still growing and as such it will continue to have these hiccups where people will scratch their head and say "that doesn't make sense" eventually however the market will find it's equilibrium.

I understand that the basic premise of this article is that it seems inherently backwards that a digital version is more expensive than a physical edition.

BTW I do not and do not plan on owning an eReader in the foreseeable future. The higher charged price might also have something to do with the fact that once someone purchases a device like this they will want to get the most bang for their buck from it and feel they are locked in to that format. I personally love having bookcases that I've filled over the years.

"When the IMF and the World Bank force a country to cut wages, lay off workers, produce for export instead of their own people, and sell off public property to cronies for less than its value, that's called "economic reform” "

And, of course, the reason the Republicans especially are so hot to nuke the US economy and are doing their best to destroy it:

“True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made.” - Franklin D. Roosevelt

Re: Economics in one lesson?

ebook pricing

Maybe the high price would be more justified if the ebook cost a dollar or two less and it came with 10 reads and you could resell it like a used book! Until that happens, I can find plenty to download from my public library. To the person that prepares books for epublication/sale-the amount they pay you to prepare a book is very small number in the ebook pricing calculation. The publishers could pay you twice as much and it wouldn't put a dent in their profits. Good luck with that idea! If you try to get more your work it will be contracted to China if you are not from there already!

Stuff For Phonies.

Reading takes time. You can't buy being well-read. There are a lot of people who can't face spending four hours a day reading books, for the rest of their lives, but who, nonetheless have an inferiority complex about how little they read. So there is a chronic market in tools for faking it. The Kindle is simply the latest such tool; along with the books on audiotape; the sets of the same books you read in high school, only bound in gilded leather at two or three hundred dollars each; and I don't know what else. One of the things I remember learning in freshman economics, thirty-five years ago, is that objects of conspicuous consumption will sometimes have a reversed demand curve. Demand goes up as price increases. The buyer that Amazon has in mind for the Kindle is someone who feels validated by dropping a thousand bucks or so on it.

middleman rip again

i'd like to make a few points as an avid reader...
1. as a new book is created today is is in digital form from it's inception. in this form,it can be formatted,proofread,font set,etc. this is done by or for the author.

2. older books are converted to this digital format when reprinted.
this is done by the holder of the reprint rights.

3. hardback books are the most expensive to produce as cost are relatively high but the selling price and collect-ability is also very high..for this reason it also may have a high resale price,as in first editions...

4. paperback book are much cheaper to mass produce and sell for less than the hardback and in turn have less "value" as a collectable item,and a small resale or lending "value".

5.ebooks cost almost nothing to produce as the "work"has been done for the tree books above.. and has no "value" as a collectable and no value as a resale item.

6. the publisher of the books may "force" the selling price through contracts (as was done to Amazon)to maximize profit
(to the publisher NOT to the author)

all of the above is done with "old school" thinking and we the readers and the author both suffer as the middleman rakes in the profits.

WOW Another little mikee moment

little mikee, your overlooking one thing here, the cost of production that you call meaningless is what makes companies that start pricing at cost of distrobution go bankrupt.

That meaningless number you talk about and claim noone should look at when pricing something for resale is usally the dominate part of long term cost, and if you don't take it into account when pricing you might as well file for bankruptcy right now.

But then your business model has none of those costs, you just puke on the keyboard and surround it with advertising and your cornies do all the work.

Retail pricing may TREND towards the "marginal" cost, but you cannot price an initial release AT the Marginal cost or your going out of business pretty fast.

But then in your little world, if it's not free, and it's digital your being ripped off... maybe they should go sell coffee mugs and t-shirts and give the e-book away for free, but then you would be bitching that they didn't fill the mug with free coffee and help you put the shirt on too.

here we go again....

"What we have here is a failure to communicate"

the discussion IS about the price of a kindle ebook being HIGHER than a printed book.. which has almost no cost to produce and no residual "value".
no said to give it away free..
as i said before this is NOT a money grab by the author (usually) but by the publisher to maximize HIS profit!!!

I wonder if this is a repeat of the widely misunderstood Marvel Comics instance - Where a digital copy was priced at the standard industry price but the physical copy was priced at a lower than normal rate as a retailer incentive. Some people just about lost their minds over that one, assuming that the price of the digital copy was being inflated as opposed to the physical copy price being reduced to remain competitive against a more convenient product.

Lower price incentives for less desirable products are a good thing. At least, it is much better than an increased price per unit to make the less desirable product more profitable with fewer sales.

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Ahahaha. That's an entirely plausible explanation, and the implications are humorous. Namely, that the publishers may be shooting themselves in the foot with the price-fixing arrangements they have with retailers, encouraging people to buy the low-margin versions over high-margin ones. Though I guess if it's true that they're actively discouraging e-book sales to preserve their dead tree business it makes sense.

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The problem with this sort of "active discouragement" is that it's also seriously customer-hostile. We all know that the marginal cost of an additional eBook copy is effectively zero, so the tactic comes across as a deliberate rip-off, particularly to those of us who have gone almost 100% eBook.

That has a very negative effect on the customer's willingness to give them ANY money for eBooks, since it encourages an attitude of "They don't respect me, why should I respect them?"

It would be really bad for books and book publishers to be seen with the same contemptuous derision the MAFIAA have earned.

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I'm not convinced this (or the other example I cited) are instances of "active discouragement". An item that is not heavily in demand can be subsidized in a number of different ways, one of which is pricing it higher so you need to sell less another is selling lower and trying to encourage volume.

I personally prefer to see the lower "incentive" cost.

Print is falling behind in terms of demand, some publishers leaving print behind entirely. If it's going to remain, we will see more and more instances of it's cost going way up or way down with little concern for what digital customers believe is fair.

Really, this is just a glass is half empty or full scenario. As easy as it is to point and say that whoever priced this is thinking backwards, you could also say that whoever priced this is thinking forwards. By attempting to increase the demand so that the overall costs of print (remember, cheaper by voucher to produce) can be met, a larger base of readers can be reached. Which is a reasonable goal of any publisher.

But we're not in the heads for whoever made these price decisions and we don't have the data they used to make said decisions. Any assumption is speculation.

However, I will say that I fail to see why publishers should be overly concerned with digital customers while pricing their physical copies. (In most cases) Digital customers are not going to buy the physical copy anyway, and those that will pirate will pirate. A fraction might be pushed either way by pricing decisions (and I do favor cheaper ebooks), but I'm not sure I see that fraction being mathematically substantial enough to cause concern.

Honestly, you guys are missing the big picture, do you know why the kindle version is more expensive? You don't have to go get it, or wait for it to be delivered, you are paying for convenience, sure, the paperback is 2 bucks cheaper, but you have to get it shipped(prolly about 4-5 bucks) and then you have to wait for it.

Both arguments are right, both are wrong

Both sides are right, both are wrong.

eBooks should be cheaper than the print version, there is no requirement to print and distribute a physical object and of you are not buying in person, there are no packing and shipping costs. There are no costs associated with operating a store i.e. heating, lighting, delivery costs, property taxes, and staff costs which typically add 30% to 40% to the cost of a product, if not more.

Pick up an magazine and a card will fall out offering a subscription at 40% or more discount, where do you think that 40% goes, it goes to the store.

The argument that books still have to be written and the author compensated is true and we are not debating that.

The scale of the compensation doesn't change whether it is an eBook or physical product. the fact is the work to author a book is the same, it all starts on pen and paper and MS Word. The final version is delivered to the publisher in the same format, an editable Word document. After it has arrived at the publisher editing and preparation for market is basically the same.

If a physical book is to be produced the files go to the presses, if it is an eBook, the files are PDFd and uploaded to the eCommerce engine.

I hate to say it but so long as people are prepared to buy into the argument that cheap eBook prices some how degrade the value of the author and how they are compensated they will remain more than the paper and publishers will take a bigger slice of the pie than they do with a paper book... eBooks priced they way this one is nothing more than a quick win for the publisher and lack of attention by the shopper.